Sen. Dodd calls for lifting Fannie, Freddie mortgage caps

WASHINGTON (MarketWatch) -- Mortgage-buying giants Fannie Mae
FNM, -5.80%
and Freddie Mac
FRE, -3.12%
should be allowed to buy more mortgages for their investment portfolios as a way to inject liquidity into the struggling mortgage market, Sen. Christopher Dodd, D-Conn., said Tuesday. "There are contradictions in the flow of mortgage credit," Dodd said in a statement, noting the companies were created in part to make that credit available to middle- and lower-income Americans. Fannie Mae has reportedly asked its regulator to allow it to buy more mortgages; the company is recovering from an accounting scandal and its purchases are now capped.

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